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Extensions of the Traditional Travel Cost Model of Non-Market Valuation to a Collective Framework: Evidence from the Field

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  • Marcella Veronesi

    () (Department of Economics (University of Verona))

  • Martina Menon

    () (Department of Economics (University of Verona))

  • Federico Perali

    () (Department of Economics (University of Verona))

Abstract

Traditional recreation demand models do not make a distinction between a household and an individual as the reference decision-making unit, thus assuming that a family maximizes a single utility function, even if it consists of different individuals. Such models ignore the possibility of family members’ divergent preferences for non-market goods. This study proposes a novel approach—the “collective travel-cost model” (CTCM)—to eliciting individual preferences for a non-market good such as a recreation site by using revealed preference data. This approach accounts for the intra-household resource allocation and the role of each household member’s preferences. We show that the collective travel-cost model can be applied to estimating a recreation demand model that yields individual welfare estimates appropriate for policy analysis of non-market goods, such as the willingness-to-pay to access a recreation site. We find that how resources are distributed within the household reflects significant differences in welfare measures.

Suggested Citation

  • Marcella Veronesi & Martina Menon & Federico Perali, 2007. "Extensions of the Traditional Travel Cost Model of Non-Market Valuation to a Collective Framework: Evidence from the Field," Working Papers 42/2007, University of Verona, Department of Economics.
  • Handle: RePEc:ver:wpaper:42/2007
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    Cited by:

    1. Chavas, Jean-Paul & Menon, Martina & Pagani, Elisa & Perali, Federico, 2018. "Collective household welfare and intra-household inequality," Theoretical Economics, Econometric Society, vol. 13(2), May.
    2. repec:kap:reveho:v:16:y:2018:i:1:d:10.1007_s11150-017-9384-y is not listed on IDEAS
    3. Hansen, LeRoy & Hellerstein, Daniel & Ribaudo, Marc & Williamson, James & Nulph, David & Loesch, Charles & Crumpton, William, 2015. "Targeting Investments To Cost Effectively Restore and Protect Wetland Ecosystems: Some Economic Insights," Economic Research Report 199283, United States Department of Agriculture, Economic Research Service.

    More about this item

    Keywords

    collective model; intra-household resource allocation; non-market valuation; recreation demand model; sharing rule; travel-cost model; unitary model; willingness-to-pay;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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